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Wheat prices hit 14-year highs after Russian invasion of Ukraine – CBC News

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Russia’s invasion of Ukraine, often called the “breadbasket of Europe,” has driven wheat prices to 14-year highs, forcing bread consumers to eat the cost.

Russia’s Feb. 24 invasion has severely hampered trade from Black Sea ports, driving up global Chicago benchmark wheat prices by 40 per cent and further pushing global food inflation that was already the highest in a decade.

Supply disruptions from Russia and Ukraine, which together account for 30 per cent of world wheat exports and 20 per cent of corn exports, will erode food security for millions of people, with the Middle East and north Africa especially vulnerable due to their reliance on imports, said Julie Marshall, spokesperson for the World Food Programme.

The prices of oil and gas have also spiked due to sanctions against Russia, while costs of freight and raw materials like steel were already soaring due to pandemic-related supply chain breakdowns.

Impact in Canada, U.S.

Even consumers in two of the world’s biggest wheat-growing nations, Canada and the United States, are paying the price.

A July 2016 file photo shows a combine working in a wheat field in Sredniy, in Russia’s Stavropol region. Russia and Ukraine together account for about 30 per cent of the world’s wheat exports. (Eduard Korniyenko/Reuters)

“Unfortunately for the short and intermediate-term, food inflation and the cost of baked goods in the United States will go up more. This will impact the most vulnerable in our society the most,” said Robb MacKie, president and chief executive of the American Bakers Association.

Weeks before the latest wheat price spike, Calgary Italian Bakery in Alberta raised prices seven per cent to keep pace with costs associated with last year’s Canadian drought and inflation in prices of flour and yeast.

Now Louis Bontorin, co-owner of the 60-year-old family business, fears he will need to raise prices significantly again once he has depleted his flour supply, which he anticipates will last four to five months. 

“This could be really, really devastating,” Bontorin said. “Bread is one of the fundamentals, the essentials, and that’s the hard part. You’re trying to just take what you need, but you’re also cognizant of what effect (higher price) has on the consumer.

“The buying power of everybody is just being eroded.”

Drop in global stocks

The threat to wheat supplies from Russia’s invasion of Ukraine has been exacerbated by a drop in global stocks of major exporters.

Supplies in the European Union, Russia, the United States, Canada, Ukraine, Argentina, Australia and Kazakhstan are set to fall to a nine-year low of 57 million tonnes by the end of the 2021/22 season, International Grains Council (IGC) data shows.

A worker displays grains of wheat at a mill in Beirut, Lebanon, earlier this week. (Mohamed Azakir/Reuters)

Some mills signed contracts with farmers last autumn for the wheat they are currently using, insulating them for now from spikes related to the Russia-Ukraine war. But one miller said once it faces those higher costs, it will have to pass them along to the bakers that buy his flour.

“It will be mandatory. Either pay the higher cost or don’t get your flour,” said the miller, who asked not to be named due to the sensitivity of the situation. “I don’t think the general population has any idea what repercussions they will face.”

After Russia invaded, Rogers Foods’ president Joe Girdner’s phone started lighting up. The bakers who buy flour from his two British Columbia mills are now looking to secure supplies further out than before, based on fears that prices could escalate even more.

It is also a problem for the miller. Spring wheat supplies were already running thin because of drought last year, and now global buyers, who were depending on Black Sea supplies, may turn to Canada for wheat and compete with domestic mills, Girdner said.

“It’s a really big concern,” he said of the Russia-Ukraine war. “And the real story will be if this situation drags on.”

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Roots sees room for expansion in activewear, reports $5.2M Q2 loss and sales drop

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TORONTO – Roots Corp. may have built its brand on all things comfy and cosy, but its CEO says activewear is now “really becoming a core part” of the brand.

The category, which at Roots spans leggings, tracksuits, sports bras and bike shorts, has seen such sustained double-digit growth that Meghan Roach plans to make it a key part of the business’ future.

“It’s an area … you will see us continue to expand upon,” she told analysts on a Friday call.

The Toronto-based retailer’s push into activewear has taken shape over many years and included several turns as the official designer and supplier of Team Canada’s Olympic uniform.

But consumers have had plenty of choice when it comes to workout gear and other apparel suited to their sporting needs. On top of the slew of athletic brands like Nike and Adidas, shoppers have also gravitated toward Lululemon Athletica Inc., Alo and Vuori, ramping up competition in the activewear category.

Roach feels Roots’ toehold in the category stems from the fit, feel and following its merchandise has cultivated.

“Our product really resonates with (shoppers) because you can wear it through multiple different use cases and occasions,” she said.

“We’ve been seeing customers come back again and again for some of these core products in our activewear collection.”

Her remarks came the same day as Roots revealed it lost $5.2 million in its latest quarter compared with a loss of $5.3 million in the same quarter last year.

The company said the second-quarter loss amounted to 13 cents per diluted share for the quarter ended Aug. 3, the same as a year earlier.

In presenting the results, Roach reminded analysts that the first half of the year is usually “seasonally small,” representing just 30 per cent of the company’s annual sales.

Sales for the second quarter totalled $47.7 million, down from $49.4 million in the same quarter last year.

The move lower came as direct-to-consumer sales amounted to $36.4 million, down from $37.1 million a year earlier, as comparable sales edged down 0.2 per cent.

The numbers reflect the fact that Roots continued to grapple with inventory challenges in the company’s Cooper fleece line that first cropped up in its previous quarter.

Roots recently began to use artificial intelligence to assist with daily inventory replenishments and said more tools helping with allocation will go live in the next quarter.

Beyond that time period, the company intends to keep exploring AI and renovate more of its stores.

It will also re-evaluate its design ranks.

Roots announced Friday that chief product officer Karuna Scheinfeld has stepped down.

Rather than fill the role, the company plans to hire senior level design talent with international experience in the outdoor and activewear sectors who will take on tasks previously done by the chief product officer.

This report by The Canadian Press was first published Sept. 13, 2024.

Companies in this story: (TSX:ROOT)

The Canadian Press. All rights reserved.

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Talks on today over HandyDART strike affecting vulnerable people in Metro Vancouver

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VANCOUVER – Mediated talks between the union representing HandyDART workers in Metro Vancouver and its employer, Transdev, are set to resume today as a strike that has stopped most services drags into a second week.

No timeline has been set for the length of the negotiations, but Joe McCann, president of the Amalgamated Transit Union Local 1724, says they are willing to stay there as long as it takes, even if talks drag on all night.

About 600 employees of the door-to-door transit service for people unable to navigate the conventional transit system have been on strike since last Tuesday, pausing service for all but essential medical trips.

Hundreds of drivers rallied outside TransLink’s head office earlier this week, calling for the transportation provider to intervene in the dispute with Transdev, which was contracted to oversee HandyDART service.

Transdev said earlier this week that it will provide a reply to the union’s latest proposal on Thursday.

A statement from the company said it “strongly believes” that their employees deserve fair wages, and that a fair contract “must balance the needs of their employees, clients and taxpayers.”

This report by The Canadian Press was first published Sept. 12, 2024.

The Canadian Press. All rights reserved.

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Transat AT reports $39.9M Q3 loss compared with $57.3M profit a year earlier

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MONTREAL – Travel company Transat AT Inc. reported a loss in its latest quarter compared with a profit a year earlier as its revenue edged lower.

The parent company of Air Transat says it lost $39.9 million or $1.03 per diluted share in its quarter ended July 31.

The result compared with a profit of $57.3 million or $1.49 per diluted share a year earlier.

Revenue in what was the company’s third quarter totalled $736.2 million, down from $746.3 million in the same quarter last year.

On an adjusted basis, Transat says it lost $1.10 per share in its latest quarter compared with an adjusted profit of $1.10 per share a year earlier.

Transat chief executive Annick Guérard says demand for leisure travel remains healthy, as evidenced by higher traffic, but consumers are increasingly price conscious given the current economic uncertainty.

This report by The Canadian Press was first published Sept. 12, 2024.

Companies in this story: (TSX:TRZ)

The Canadian Press. All rights reserved.

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